The International Technology Management Review, Vol. 3 (2013), No.

2, 80-91

Barriers to M-commerce Adoption in Developing Countries – A Qualitative Study among the

Stakeholders of Bangladesh

Mohammed Mizanur Rahman

School of Business, University of Western Sydney
Parramatta, New South Wales, 2150, Australia
Email: mizan.rahman@uws.edu.au, mizan1214@yahoo.com.au

Abstract

The purpose of this qualitative study is to explore the key factors that act as a barrier to
m-commerce (e-commerce through mobile phone or any wireless device) adoption in developing
countries, and to investigate the ways to overcome these barriers. 27 face to face in-depth
interviews were conducted among the participants who were classified as bankers, solution
providers, telcos, retailers and government official. Lack of literacy, trust and conflict of interest
between telcos and banks were found to be the major barriers to the adoption of m-commerce in
Bangladesh. The research output can help in the design of a long term policy to build up a large
and sustainable m-commerce enabled society.

Keywords: M-commerce, E-commerce, Barriers, Qualitative study, Bangladesh,

1. Introduction

There are a number of variations in the definition
of m-commerce. Many scholars considered m-
commerce to be mobile e-commerce.1 Smith2
defined m-commerce as the buying and selling of
goods and services through wireless handheld
devices such as cellular phones and Personal
Digital Assistants (PDA). According to others
m-commerce is the exchange of goods, services
and information using mobile Information and
Communication Technology (ICT).3
SMS, mobile internet, games, music, video, news
and sports.6 Location tracking of goods and people
is also one of the latest applications of m-
commerce. Online retailers have started to realize
the potential of m-commerce market, with 48% of
them already having developed mobile optimized
m-commerce site.7 Figure1, based upon the work of
two separate studies (see Refs. 8 & 9), gives an
overview of different types of m-commerce
applications.

M-commerce is a rapidly growing market, The number of mobile phone subscribers

especially in recent years and there are signs that
this growth will continue. The widespread
penetration of mobile phone coupled with some of
its key characteristics including versatility,
portability, personalized, 24/7 connectivity and
ease of use, has made m-commerce a trading tool
with huge potential for the global marketplace.
According to Gartner research,4 mobile payment
transaction worldwide has reached $105.9 billion in
2011 and is predicted to be $617 billion by 2016.
Mobile payment users worldwide will exceed 2.5
billion in 2015, a 40% increase from 1.8 billion in
2011.5 Today mobile phones are not simply being
used for conversation only, but 40% of subscribers
are accessing different mobile services such as
worldwide surpassed 6 billion in 2011, with three
quarters of them coming from developing
countries.10 The number of the mobile phone users
in developing countries provides many
opportunities for the exploration of an m-commerce
market in these regions. However mobile
broadband, the key technology of m-commerce, is
highly adopted in developed countries, accounting
for 701 million subscribers compared to 484
million in developing world.10 Understandably,
developing countries fall behind the developed
world in utilizing the power and potential of m-
commerce. Mobile banking and shopping, mobile
advertising, mobile ticketing, mobile movies and
videos are commonly used applications in

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80
developed countries, however in the developing
world mobile phones are mainly used as tools of
personal communication.
Figure 1: Applications of m-commerce, complied
from two sources 8 & 9
M-commerce is an advanced and fast growing
technology which has many barriers that are unlike
those of other new technologies.11 These barriers
need to be identified as they will affect the steady
adoption of m-commerce applications.12
Bangladesh has been chosen as the location for this
research due to its developing country status and its
substantial mobile phone penetration, reported as
65% (~98.5 million) by February 2013.13 The
purpose of this paper is to investigate the barriers to
m-commerce adoption in developing countries and
to find the ways to overcome those barriers. The
main research question set for this study is as
follows:
What are barriers to m-commerce adoption in
developing countries?
Literature on m-commerce adoption will be
reviewed in the next section followed by the
research method, results and implications, and
conclusion respectively. The last section will
address the limitations of the current research and
pathways for future research.
2. Literature Review
In the last twelve years a large number of research
papers have been published that studied the key
factors of m-commerce/e-commerce adoption in
both developed and developing countries. Papers
published before 2000 were not reviewed because
of the newness and rapidly changing nature of m-
commerce technology. Prior studies frequently
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81
focused on the factors that positively influence the
adoption of m-commerce. Perceived usefulness
(PU) and perceived ease of use (PEOU) have been
identified as major contributing factors for m-
commerce adoption worldwide.14-27 However
perceived usefulness was not found to be
significant in Bangladesh and Sub-Saharan Africa
by some studies.28 & 29
Numerous studies also found little or no significant
impact of perceived ease of use in the adoption of
m-commerce.29-42 Research revealed that there are
many other factors that affect m-commerce
adoption positively such as attitude ( see Refs. 14,
17, 19, 25, 33, 38, 41, 43, 44), subjective norm (see
Refs. 24, 25, 35 & 37) social influence (see Refs.
22, 29, 30, 32, 35, 36, 45 & 46), self efficacy (see
Refs. 25, 28, 36, 37), facilitating condition (see
Refs. 14, 22, 25, 36, 41 & 48), effort expectancy
(see Refs. 45, 48 & 49),performance expectanc,47-49
job relevance,24 & 39 reputation,42 & 50 perceived
credibility,14 experience (see Refs. 17, 24, 44 & 48-
51), mobility,52 knowledge,21,53-55 compatibility (see
Refs. 16, 31, 34, 35, 38 & 52), convenience,16, 56, 57
perceived enjoyment (see Refs. 31, 35, 40 & 58),
perceived playfulness,17 quality (see Refs. 17, 36,
39, 50 & 51) and speed.16, 21 & 57
Little research has addressed the barriers that have
negative impact in the adoption of m-commerce.
Perceived risk has been identified as among the
major barriers of m-commerce adoption effecting
the penetration negatively (see Refs. 25, 34, 37, 38,
42, 47 & 57). Consumers are highly concerned
about their privacy and security, if not assured that
would deter m-commerce penetration. The effect of
perceived security and privacy was found to be
significant in Bangladesh from consumer’s
perspective.28, 33 Lack of trust was found to be
another major barrier to m-commerce adoption.
Luo et. al.47 validated the negative correlation
between trust and perceived risk; meaning lack of
trust poses a high risk to the adoption of
m-commerce. Various issues are involved with
trust such as user’s experience, poor relationship,
bad reputation, stakeholder’s unethical business
practice and risk (see Refs. 47, 51, 60 & 61). All
these issues need to be addressed when dealing
with trust. Perceived cost acts as a barrier to m-
commerce adoption as higher cost lowers the user’s
intention to use m-commerce services (see Refs.
17, 28, 32 & 38). The effect of anxiety has also
been found to be negative, more anxiety leads to
less adoption, to mobile shopping adoption in
Taiwan.62 Venkatesh et. al.49 found negative
relationship between anxiety and the intention to
use IT adoption. Some other factors, although
rarely studied, were found to have been acted as a
barrier to m-commerce adoption such as
complexity,15, 22 & 59 slow connection,57 and limited
capacity.57
There has been little research that has explored the
barriers to m-commerce adoption in developing
countries. The majority of the authors have studied
the barriers to m-commerce adoption in developed
countries from the user’s perspective; relying on
quantitative methods (for example Refs. 14, 15, 28,
29, 30, 32, 33, 34, 53 & 56). Very few researchers
have studied these barriers from the stakeholder’s
perspective using qualitative methods. As the
qualitative methodology provides a deeper and
more detailed understanding on the subject than the
quantitative approach,63 this study used this method
in exploring the key barriers to commerce adoption
in developing countries.
3. Research method
M-commerce is a new concept in Bangladesh and
people have not yet realized the benefits of using
this new technology. Studying the barriers to m-
commerce adoption in Bangladesh will assist in the
development of an in-depth understanding of the
key issues and challenges to its rapid uptake.
Qualitative research has been chosen as it allows
the researcher to gain better understanding of the
problem and to identify any phenomena, patterns,
behaviour and attitudes.67 This qualitative research
relied on analyzing textual data from interviews
rather than numerical data of survey research.68
3.1 Sample
It is usual that small and selective samples are used
in qualitative research as it requires in-depth
analysis of a large volume of data.69 For this project
27 face to face in-depth interviews were conducted
to build on the preliminary insights into what
people of different social categories think and
believe about m-commerce. Initially it was not
known how many interviews would be required to
explore the research objective, but the intention
was to carry on until similar and repetitive
responses were gathered on the subject matter.64
Respondents from different sub categories who
were actively involved in the m-commerce arena
were the target participants during the interviews.
Convenience sampling was used to select the
participants, who were later classified as solutions
providers, telcos, banks, government officials and
retailers. All the participants were assured of their
confidentiality and anonymity.
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3.2 Data Analysis
As the current research is more exploratory than
confirmatory in nature, content analysis was chosen
to analyze the interview transcript.70 Qualitative
content analysis is defined as “a research method
for the subjective interpretation of the content of
text data through the systematic classification
process of coding and identifying themes or
patterns”.71, p.1278
Nvivo software was used for the analysis,
especially during coding and annotating. All the
transcripts were thoroughly reviewed and then
coded by organizing key words/phrase under
different nodes, to uncover the key
pattern/themes.70 Each node was then carefully
reviewed to look for any similarities and
differences in the argument raised around various
issues/factors. Obviously not all the participants
agreed on the same issue or concept. They varied in
their ideas, thinking and reasoning. The
factor/barriers with strong arguments, supported by
many, were identified as the major barriers to m-
commerce adoption. In contrast, the factors/barriers
justified by weak arguments and with less support
were identified as having minor impact to m-
commerce adoption in Bangladesh.
4. Results and Implications
4.1 Demography
The participant’s demographic information is
presented in table 1. All the participants were
stakeholders of m-commerce, being actively
involved in m-commerce business either directly or
indirectly. They were categorized as telcos,
bankers, solution providers, retailers and
government officials. Among the twenty seven
interviewees thirteen were retailers, five telco’s
employees, four from banks, four from solution
providers and one government official. Although a
large number of participants were retailers,
individuals who are not usually highly qualified
and work as agents on behalf of a telco, their
contribution in the study was found to be minimal.
In most cases their answers were recorded without
sufficient explanation and justification; normally
short reply that answers what rather than why.
They possessed practical experience in dealing with
telcos, and that experience was found to be an
important information source for analyzing some
major issues.
 Table 1: Demographic information

Interviewee’s Brief introduction about the organization Interviewee’s Qualification

Identity position
(anonymous)
Telco 1 One of the largest mobile Operators in M-commerce manager Highly educated
Bangladesh
Telco 2 One of the largest mobile Operators in Head of business development & Highly educated
Bangladesh financial services
Telco 3 Mobile operator in Bangladesh Manager of m-commerce division Highly educated
Telco 4 Mobile operator in Bangladesh Manager responsible for m-commerce Highly educated
Telco 5 Mobile operator in Bangladesh Head of distribution Highly educated
Banker 1 Private bank – received permission to run Head of alternate/mobile banking Highly educated
mobile banking at the time of interview
Banker 2 Private bank – received permission to run Assistant vice president of mobile Highly educated
mobile banking at the time of interview banking
Banker 3 Private bank – But did not received permission Head of kishoreganj (district) branch Highly educated
to run mobile banking at the time of interview
Banker 4 Public bank – But did not receive permission Manager of IT section, Main branch, Highly educated
to run mobile banking at the time of interview Dhaka
Solution provider 1 Develop software and application for mobile Assistant general manager Highly educated
banking services
Solution provider 2 Develop software and application for mobile Head of project management and IT Highly educated
banking services services
Solution provider 3 Develop software and application for mobile CEO Highly educated
banking services
Solution provider 4 Conduct research in the field of mobile Professor of a private university, Highly educated
commerce, on behalf of a private university Bangladesh
Govt. official Government’s regulatory body Chairman Highly educated
Retailer 1 Shop (in Dhaka city) for mobile recharge & Shop owner Moderate
utility billing through m-billing services educated
Retailer 2 Shop (in a rural area) for mobile recharge & Shop owner Lower educated
utility billing through m-billing services
Retailer 3 Shop (in Chittagong city) for mobile recharge Shop owner Lower educated
& utility billing through m-billing
Retailer 4 Shop (in a rural area) for mobile recharge & Shop owner Moderate
utility billing through m-billing services educated
Retailer 5 Shop (in a rural area) for mobile recharge & Employee Lower educated
utility billing through m-billing services
Retailer 6 Shop (in a rural area) for mobile recharge & Shop owner Lower educated
utility billing through m-billing services
Retailer 7 Shop (in a rural area) for mobile recharge & Shop owner Moderate
utility billing through m-billing services educated
Retailer 8 Shop (in Dhaka City) for mobile recharge & Shop owner Moderate
utility billing through m-billing services educated
Retailer 9 Shop (in a district town ) for mobile recharge Employee Lower educated
& utility billing through m-billing
Retailer 10 Shop (in a district town) for mobile recharge & Shop owner Highly educated
utility billing through m-billing
Retailer 11 Shop (in a district town) for mobile recharge & Shop owner Lower educated
utility billing through m-billing
Retailer 12 Shop (in a rural area) for mobile recharge & Shop owner Lower educated
utility billing through m-billing services
Retailer 13 Shop (in a rural area) for mobile recharge & Employee Lower educated
utility billing through m-billing services

Highly educated: Bachelor or above

Moderate educated: Between year 8 and year 12
Lower educated: below year 7

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4.2 Lack of literacy- One of the major barriers
to m-commerce adoption
Although the lack of literacy is not a big challenge
for mobile phone adoption in Bangladesh, it was
noted by a number of interviewees as one of the
biggest barriers to rapid uptake of mobile banking
and other m-commerce services in this country.
They were asked why lack of literacy is seen to be
the major barrier to m-commerce adoption. Some
reported that the skill of illiterate people, being
limited to receiving and sending a call, restricts
them from engaging in m-commerce activities.
“Literacy is the main barrier to using m-commerce
service.”– Telco 5
“But in case of mobile banking literacy is required
as the customer should be able to read the SMS.
Forget about English SMS, how many people can
read Bangla? Also when they will be asked to enter
their password, will they be able to enter that
without the help of any one? That is a question and
it needs some research to get a solution of it.”
– Banker 2
It’s been acknowledged that illiteracy can’t be
removed from the country quickly but there is a
way for illiterate people to get the maximum
benefit from m-commerce services. One possible
solution is the Customer Care Point (CCP), highly
used in Bangladesh by both literate and illiterate
people. Customer Care Points (CCP), are spread
like mushrooms in Bangladesh, helping customers
to pay their utility bills through mobile phone with
a small charge.
“To be honest 90% customers are still paying
through our outlets (CCP). It’s no matter the
customer is educated or not and it’s because of
convenience and tradition.” – Telco 2
“But does really an individual paying his bill from
his mobile phone? No he goes to the Customer care
point or outlet of that mobile company and pay
cash to that outlet people and those outlet people
are paying the bill on his behalf from their own
mobile phone.” – Banker 1
Customer care point might be a solution for
integrating illiterate people with m-commerce
services such as m-billing, m-ticketing and
m-remittance, but might not be sufficient for
mobile banking which requires a higher level of
literacy to maintain the confidentiality of the
account details.
“But mobile banking is not that simple............as
you know confidentiality has to be maintained
when someone doing mobile banking, such as his
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84
password, his account details which must not be
compromised to third party such as agent.”
– Banker 1
It has become clear that low literacy levels have
been recognized as among the major barriers to
m-commerce adoption in Bangladesh because a
reasonable level of literacy is required to read an
SMS and use the keypad for various m-commerce
services. Although customer care points (CCP)
have been widely used by both literate and illiterate
people in Bangladesh, they are not suitable for
conducting mobile banking services as an
individual’s password and account details can’t be
disclosed to a third party. That means illiterate
people need to use this confidential information by
themselves without the help of CCP or others,
obviously a hurdle for them. From the
stakeholder’s point of view, the illiterate population
remains a great potential m-commerce market in
Bangladesh as they are the majority, and many of
them are already using mobile phone. It is therefore
hoped that soon a compatible and comfortable
solution will be provided for illiterate people to
integrate them into various m-commerce services.
4.3 Perceived risk
Previous studies had identified perceived risk as
one of the major factors affecting m-commerce
adoption negatively, although the current study
found risk to be lower in Bangladesh from
stakeholder’s perspective. In Bangladesh
stakeholders are well aware of the negative impact
of risk in m-commerce adoption and considered
this issue as high priority, but remained confident
of the security and privacy of the mobile network.
They believed that the mobile network of
Bangladesh is secure enough to prevent any loss or
fraud in monetary transactions, and also to protect
the confidentiality of the user.
“Actually security is a big issue for any financial
network.” – Banker 1
“Fully secured. Security is our first priority that’s
why we are upgrading our software and hardware
equipments.... and obviously all the SMS will be
encrypted.” – Solution provider 2
“This infrastructure is secure enough for mobile
banking. Already Bangladeshi mobile operators
are handling lots of money through this
infrastructure.” – Solution provider 3
The existing literature on m-commerce or
e-commerce adoption views risk purely from the
technical point of view, where the consumers were
found to perceive that the mobile network is not
sufficiently secure to prevent any loss of
confidentiality and/or money (see Refs. 34, 72-75).
As the technological risk is high in m-commerce
adoption, with costs of £1 trillion annually due to
cybercrime,76 the interviewees mainly considered
risk from the technological point of view
overlooking other issues of risk such lack of trust
and poor business practices. These will be
discussed separately in the next section.
The technology employed and its security features
are beyond the scope of this study. It can be
assumed that the mobile network in Bangladesh is
as technically secure as those in developed
countries as internationally recognized telcos are
behind the operation and development of this
network, implementing the same technology as in
developed countries. From the stakeholder’s
perception, the mobile network of Bangladesh is
secure enough to conduct any monetary
transactions without compromising confidentiality.
However this study does not reflect consumer’s
perception of risk that may be different than the
perception of the providers.
4.4 How trustworthy the telcos are
Almost all the interviewees were impressed with
Bangladesh Bank and the Bangladesh
Telecommunication Regulatory Commission
(BTRC), the major government bodies regulating
m-commerce services and industries in Bangladesh.
No question or suspicion was raised about the
trustworthiness of banks who have long been
serving the customers in Bangladesh. The only
provider of m-commerce that received complaints
(mostly minor) from the participants was a telco.
Telcos may be trusted in the security of their
network, but how trustworthy are they in their
business, especially while dealing with the
customers for mobile financial services? As
reported by some interviewees
“How can I trust them (telcos) that they won’t
disclose my transaction details; because the
payment information will be stored at the telco’s
server and telco’s staff can access them? They
could provide that information to third parties if
they have a close tie with them or if sufficient
amount of bribe is given. You know I can retrieve
your call history from your mobile operator just by
paying some money.” – Retailer 1
“The trust we had in the mobile operators is
already sliding down, now if we open the windows
for doing financial business as well then the rest of
the trust will have to be sacrificed.” - Solution
provider 3
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“But they (telcos) don’t want to share the risk; they
only want to share the profit”. – Govt. official
Telcos need to buildup trust by providing excellent
customer service. Some participants seemed to
have lost their trust on telcos due its poor customer
service, as reported
“I moved from Post paid to prepaid service
because of unexpected billing from GP (Grameen
Phone), but even the prepaid is also eating you
fast.” – Retailer 2
“As you know that their (telcos) customer service is
not free. On top of that you can’t reach them until a
long paid waiting, and once you reached them they
started to behave unprofessional, rude then how do
you feel that.” – Retailer 3
The allegations against telcos were not investigated
to determine their validity as that was not within
the scope of the current study. The objective was to
see how those different perceptions and beliefs
affect m-commerce adoption in Bangladesh. Some
major stakeholders do not recognize telcos as
trustworthy enough when dealing with mobile
financial services. Their past business experience
with the telcos has led them to think this way. Trust
needs to be built up by the telcos to enhance
confidence among the users and other stakeholders.
Assurance of technological security alone will not
build up that trust; it needs professionalism in
doing business such as excellent customer service,
ethical business practice and reputation. When all
of these are in place, users and other stakeholders
will be in a position to place their trust in telcos to
achieve the expected goal.
4.5 Telco-led vs. Bank-led mobile banking
Today the model of mobile banking has become
another important issue among the stakeholders of
m-commerce in Bangladesh, especially between the
mobile operators and the banks. Telcos are the
pioneers of mobile financial services in
Bangladesh. They are giving backend support to
the bank’s SMS banking, which is a kind of
information based mobile banking. As a result they
want to lead mobile banking in Bangladesh.
Although none of the telcos drew attention to this
stand-off in their interviews, it was raised by
bankers, solution providers and the government
official.
“They still believe and dream in telco led model
mobile banking in Bangladesh” – Govt. official
Bangladesh Bank intervened to resolve the conflict
by imposing clear and strict regulations that
favored the banks, i.e. adopting a Bank-led mobile
banking model. Telcos will get a fee for the use of
their network but will not receive any share in the
revenue generated by mobile banking. The
Governor of Bangladesh Bank made it clear that
mobile banking in Bangladesh would be a Bank-led
model and that the both parties must obey the
ruling to run their businesses seamlessly.
“And you know that Bangladesh Bank governor
already announced clearly that mobile banking in
Bangladesh would be a Bank-led model not Telco-
led. So definitely they have to comply with this
regulation to run their business.” – Solution
provider 2
How far the telcos will cooperate with the banks in
Bank-led mobile banking is yet to be seen, and
some interviewees expressed their reservations
about it. Their reasoning is that the telcos are one
of the most powerful stakeholders of m-commerce
in Bangladesh who might defy or express their
dissatisfaction by providing limited or no access to
their network. They have done this in the past and
are still limiting access on some occasions, which
raised questions from the interviewees about their
willingness to comply with regulations. As noted
by some of the interviewees
“Although we are saying that mobile banking
would be a Bank-led model but you know telco’s
are still not giving access in many cases and it’s a
big problem.” – Govt. official
“From my experience I’m in doubt as to whether
the mobile operators will cooperate with the banks
for implementing mobile banking.” – Solution
provider 3
These suspicions and the potential non-cooperation
from the telcos may lead the stakeholders and
government to rethink the Bank-led model and
advocate for a mixed model where the banks and
the telcos will share the revenue. This mixed model
could help to resolve the conflict between the
parties. Some banks and even the authorized bodies
of the government have agreed to work towards
this co-operative model, indicated as follows
“But in such case the two parties, for example a
bank and a mobile operator make mutual deal
where bank agree to give some share to the
operator then we don’t stop them. In that case it
could be a telco led model or mix model.” – Govt.
official
From the above analysis a few things have become
clear. First, the model of mobile banking adopted,
has been decided as Bank-led model by Bangladesh
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Bank. Secondly this decision has been accepted as
legitimate by the interviewees since the telcos are
reluctant to take any liabilities or risks in mobile
banking. Thirdly, the stakeholders of m-commerce
such as bankers, solution providers and government
officials are still not confident of the success of
Bank-led mobile banking due to the potential non-
cooperation from the telcos. Telcos are suspected
of being unreliable because of their past attitude
where some stakeholders experienced limited
cooperation or non cooperation from them when
something went against their (telcos) interests.
Telcos have wanted to lead mobile banking in the
past, and this desire may have not yet been
dispelled. They might defy regulations that are
unfavorable to them by not fully cooperating with
the stakeholders. For this reason some stakeholders
advised for the mixed-model of mobile banking,
where the telcos and the banks work as partners
and share the revenue is the most likely to succeed.
4.6 Perceived Cost
Perceived cost was hypothized to be a barrier in
many studies, and its effect was also found to be
significant in some countries. The current study
focused on this issue by posing a question, asking
to what degree cost influences the user’s intention
to use m-commerce. The cost includes the average
price of a mobile phone as well as the access fee
for using various m-commerce services such as
m-billing, m-ticketing, etc. The average cost of
using m-commerce service was found to be
affordable by the mass population of the country,
as reported
“The price (mobile phone set) could be in between
1300 to 1900Tk (~$16-$22) by which you can
perform your all mobile financial activities.”
– Telco 4
It (mobile phone set) could cost between 1100Tk to
1500Tk (~$15 -$20).” – Telco 3
“It (fee for m-billing) is the market standard, 5Tk
(~$0.06) for up to the bill 400Tk, 10Tk for between
401 to 1500Tk, 15TK for between 1501Tk to
5000Tk and 25TK (~$0.3) for over 5000Tk.”
– Telco 4
“I think it is affordable by the lower income people
even though we charge between 5Tk to 25Tk
……people still think our service is cheaper than
banks.” - Telco 2
From these and other comments, clearly the
average cost of a mobile phone in Bangladesh that
is compatible with m-commerce service ranges
from $15 to $22, equivalent to the world’s cheapest
phone, at below $15 launched by Vodafone in
2010.65 The service fee is also not seemed to be
very expensive. For example, the access fee for m-
billing ranges from $0.06 to $0.3 and is reported to
be affordable by the majority of the people of
Bangladesh, whose GDP per capita (PPP) is
$1700.66 The stakeholders believe that the negative
effect of cost in the adoption of m-commerce is
minor in Bangladesh.
4.7 Government regulation
‘Bangladesh Bank’ (BB) and the ‘Bangladesh
Telecommunication and Regulatory Commission’
(BTRC) are the two major government bodies that
regulate the stakeholders of mobile commerce.
Telcos and banks do expect cooperation and a
positive response from these two authorities. Most
of the interviewees expressed their satisfaction
when asked about the cooperation they often
receive from these two government bodies.
“Bangladesh government is doing very good job.
BTRC is also very cooperative. Bangladesh Bank is
also slowly opening up.” – Telco 1
“I would say government is more positive now than
ever before on digitalization…They are also very
active and positive.” – Telco 2
“So far I think they (BB & BTRC) are cooperative
enough because as soon as I convince them about
any new product they respond quickly.” – Telco 3
“Yes, I think they (BB & BTRC) are very
cooperative and positive that’s why we have done
that much until today.” – Telco 4
It is apparent that Bangladesh Bank has the right to
make a final decision on m-commerce services in
Bangladesh, and almost all the interviewees were
found to be positive and impressed with the
activities of Bangladesh Bank. Bangladesh Bank
has the authority to resolve any dispute by
regulating the mobile financial services. For
example, recently Bangladesh Bank resolved the
debate between Telco-led vs. Bank-led mobile
banking by making the final decision in favour of
the banks, meaning it would be a Bank-led model.
The types of business that can be conducted by the
banks through mobile phones have also been
determined by Bangladesh Bank. These are almost
anything but not P2P, person to person mobile
transaction, which has yet to be approved.
“Bangladesh Bank has given the permission for
mobile banking only to the banks not to the telcos.”
– Banker 2
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“And you know that Bangladesh Bank governor
already announced clearly that mobile banking in
Bangladesh would be a Bank-led model not Telco-
led.” – Solution provider 2
“At present person to person fund transfer in
mobile banking has not been approved by
Bangladesh Bank yet. It can be done but not person
to person but from business to person, govt. to govt.
or govt. to business. For example, salary or wages
can be paid to the employees through mobile
phone.” – Banker 1
There is some evidence to suggest that the majority
of the stakeholders are satisfied with the way
m-commerce business is regulated by the
government. Bangladesh Bank has made some
progress in the field of m-commerce regulation and
is thought to be proceeding to the right direction.
The second government body, Bangladesh
Telecommunication and Regulation Commission
(BTRC), is also cooperative and positive according
to most interviewees. The Bangladeshi
Government, like other governments of third world
countries, is seen as being a bit slow and sometimes
stuck in the middle. While it may be quite obvious
that government needs to do a lot for launching
fully fledged m-commerce services, it appears to be
moving towards that goal slowly.
4.8 Others factors – not considered as barriers
During the face to face interview the participants
were asked open ended questions regarding the
barriers to m-commerce adoption in Bangladesh.
The motive was to get their own perception
spontaneously, and caution was taken so that they
were not biased by the interviewer’s view. The
interviewer’s own opinion, based on the results of
the literature review, was presented to them later at
the interview to facilitate discussion. In most cases
they seemed to support their own arguments and
justify why some factors although found to be
barriers to m-commerce adoption in other
countries, were not seen as such in Bangladesh.
Sometimes they agreed with the interviewer’s view
that some factors also have a big impact in the
adoption of m-commerce in Bangladesh, but
seemed to be confused not recognizing them as
barriers, but rather calling them positive factors.
Examples of some factors are perceived usefulness,
perceived ease of use, speed, quality and
knowledge which were found to have a positive
influence on m-commerce adoption in previous
studies.
“Knowledge is a precondition for m-commerce
adoption rather as a factor or barrier.”- Govt.
official

“We get proper training from telcos so found them
(m-billing and m-remittance) easy to use. Also
customer’s think it is useful otherwise why would
they use it?” – Retailer 4
“Obviously these (usefulness and user friendliness)
are very important for any new technologies. But
when you talk about barriers then that do not
sound appropriate for these cases. Barrier is
something that drags you behind but their
(usefulness and user friendliness) job is to push you
ahead.” – Solution provider 3
“These (usefulness, user friendliness, speed and
quality - in response to the interviewer’s query in
regard) all are just the characteristics of a product,
naturally we must have these things to get the
market. But people still lose market even though
they have the quality products. Why? Because they
do not consider other external factors that could
wipeout the market, you can say those as barrier.”
– Telco 4
In conclusion the stakeholders have differentiated
between positive factors and barriers to m-
commerce adoption. Perceived usefulness,
perceived ease of use, speed and quality are the
characteristics of a product required to gain access
to market. In contrast barriers are perceived to have
negative impact to the adoption that act as a
drawback to that market. The participants realized
the importance of those factors and agreed on it’s
positive impact towards m-commerce adoption, but
disagreed in some extent to consider them as
barrier. The impact of other factors such as
complexity, anxiety, limited capacity and size were
perceived to have negative but minimal impact to
m-commerce adoption.
5. Conclusions and Implications
The current research has investigated some factors
of m-commerce adoption not studied previously in
the context of Bangladesh, including lack of
literacy, the conflict of interest between the banks
and telcos as to who should lead mobile banking,
along with risk and trust. These factors emerged
from the qualitative analysis of this research.
On behalf of the Bangladesh Government
Bangladesh Bank (BB) has resolved the conflict by
ruling in favour of the banks, meaning Bank-led
mobile banking is the preferred adopted model. It is
yet to be seen how well the telcos cooperate with
the banks and with other stakeholders in this
Bank-led model, as some would still prefer a
Telco-led model mobile banking.
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88
Lack of literacy was viewed as the major barrier to
m-commerce adoption in Bangladesh by the
majority of the stakeholders, they noted m-
commerce in Bangladesh is SMS based, and
customers need to be able to read and write to use
SMS to conduct any m-commerce services.
However the reality for most Bangladeshi
customers is that they are not accessing m-
commerce services independently, but through the
customer care points (CCP) which are spread
whole over the country. The role of the CCPs may
overcome the barrier to m-commerce adoption in
Bangladesh presented by illiteracy. Other barriers
to m-commerce such as perceived risk, lack of
knowledge, government regulation and cost were
also raised by the participants, but these were not
considered to be significant barriers to the adoption
of m-commerce in Bangladesh.
6. Limitation and future research
This research is neither a technical paper of m-
commerce nor does it discuss the government
policies or regulations; rather the adoption behavior
of this technology is studied across a wide range of
population of a developing country. Secondly,
although Bangladesh has been selected as an
example of developing country, what works in
Bangladesh may not be universally transferable to
other developing countries. Thirdly, smart phone
and iPad technologies were not considered as
mediums of m-commerce in this research, as these
were widely adopted only after this research had
commenced.
It would be interesting to study the link between
personal awareness of m-commerce and media
advertising to see the effectiveness of advertising in
raising m-commerce awareness. Another
perspective would be to investigate how a
company’s performance, growth, reputation,
solvency and profitability can affect the adoption of
m-commerce. These factors were, however, beyond
the scope of this research project.
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